Beijing (AFP) – China said on Saturday it will exempt some Nexperia chips from an export ban that was imposed over a row with Dutch officials and has alarmed European businesses. Anxiety over chip shortages began when the Netherlands invoked a Cold War-era law in late September to effectively take control of Nexperia, whose parent company Wingtech is backed by the Chinese government.
China, in response, banned any re-exports of Nexperia chips to Europe and accused the United States of meddling in Dutch legal procedures to remove Nexperia’s Chinese CEO. Beijing blamed what it said on Saturday was “the Dutch government’s improper intervention in the internal affairs of enterprises” for leading to “the current chaos in the global supply chain.”
“We will comprehensively consider the actual situation of enterprises and grant exemptions to exports that meet the criteria,” a Chinese commerce ministry spokesperson said in a statement, without offering specifics. The resumption of some Nexperia shipments was part of a trade deal agreed by Chinese President Xi Jinping and his US counterpart Donald Trump after talks in South Korea on Thursday, the Wall Street Journal reported, citing unidentified sources.
Chinese and European Union officials were also to discuss Nexperia while meeting in Brussels, EU spokesman Olof Gill had said. Those talks on Friday were “a welcome opportunity for both sides to update on…the introduction and implementation of export controls,” Gill said in a statement on Saturday. The discussions covered “controls on rare earth elements introduced or proposed by China, as well as an update on controls and developments on the EU side,” he said. The statement did not mention Nexperia specifically.
Separately, Berlin welcomed Beijing’s move as a “positive sign” on Saturday. “The latest reports from China are positive initial signs of an easing of tensions,” an economy ministry spokesman told AFP. He stressed that “a final assessment” of the implications of Beijing’s announcement was not yet possible.
– Automaker anxiety –
Nexperia produces relatively simple technologies such as diodes, voltage regulators, and transistors that are nonetheless crucial as vehicles increasingly rely on electronics. Its chips are mainly found in cars but also in a wide range of industrial components, as well as consumer and mobile electronics such as refrigerators. The company makes them in Europe before sending them to China for finishing and then re-exporting them back to European clients.
European carmakers and parts suppliers had warned of shortages of chips supplied by Nexperia that would force stoppages at production lines in Europe. The chipmaker supplies 49 percent of the electronic components used in the European automotive industry, according to German financial daily Handelsblatt. The European auto lobby ACEA warned last month that production would be seriously hit.
Nexperia’s chips, while widely used, are not “unique” in terms of technology and therefore “easily substitutable,” French parts maker OPmobility said. However, suppliers must get the new products approved by automakers, which takes time. Beijing suggested on Saturday that some shipments would resume. Companies experiencing difficulties could contact the commerce ministry or local authorities, the Chinese spokesperson said.
© 2024 AFP
